PREPARING FINANCIAL STATEMENTS As the accountant for Wheatley International, it is your job to prepare the company's income statement and balance sheet. Use the accounts listed below to construct the statements. Assume that the tax rate is 25%. List of Accounts for Wheatley International Accounts Receivable$ 120,600 Land1,500,000 Notes Receivable61,200 Insurance Expenses54,000 Accounts Payable45,000 Interest Expenses24,600 Common Stock1,896,000 Depreciation400,000 Net Sales1,053,000 Ending Inventory126,600 Notes Payable (Long-Term)210,000 Beginning Inventory154,800 Retained Earnings1,459,800 Advertising Expense90,000 Cash72,000 Salaries180,000 Short-Term Notes Payable15,600 Merchandise Purchased (for Inventory)316,800 Buildings1,050,000 Rent13,800 Utilities8,400 Equipment & Vehicles1,066,000 Goodwill90,000 Bonds Payable60,000
Wheatley International Income Statement FY 20XX REVENUES Net Sales$1,053,000 COST OF GOODS SOLD Beginning Inventory$154,800 Merchandise Purchased+ 316,800 Cost of Goods Available for Sale471,600 Less: Ending Inventory 126,600 Cost of Goods Sold$345,000 GROSS PROFIT (GROSS MARGIN)$708,000 OPERATING EXPENSES Selling Expenses Salaries$180,000 Advertising90,000 Total Selling Expenses$270,000 General Expenses Insurance$54,000 Interest Expense24,600 Rent13,800 Utilities8,400 Total General Expenses$100,800 Total Operating Expenses $370,800 NET PROFIT (INCOME) BEFORE TAXES$337,200 Less: Income Tax Expenses (25%)$ 84,300 NET INCOME (PROFIT) AFTER TAXES$252,900
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